LANG 


Money . 


I 


MONEY. 


^^-^  i^iiLxm, 


.>iiA 


M  0  N  E  Y  . 

Demand  and  supply  being  common  to  all  commodities,  in  e>:- 
cliange  by  barter,  there  are  four  variable  relations  to  be  adjusted, 
and,  as  these  adjustments  can  be  made  only  by  compromise,  each 
party  endeavors  to  bar  or  defend  himself  against  the  other  by 
assertions,  sometimes  loud,  frequently  false,  and  generally  reite- 
rated. To  avoid,  in  some  degree,  a  practice  so  detrimental  to 
morals,  and  so  destructive  to  commerce,  money  was  invented. 
In  other  words,  gold  of  uniform  quality  was  divided  into  pieces 
adapted  to  commerce,  and  issued  under  Government  seal. 

As  money  of  gold  is  an  object  of  highly  concentrated  demand, 
and  as  it  does  not  denote  the  supply  of  the  commodity  of  which 
it  consists,  it  is  assumed  to  be  an  object  of  demand  only ;  and 
correlatively  the  commodity  offered  in  exchange  is  assumed  to  be 
an  object  of  supply  only.  Thus  the  variable  relations  of  ex- 
change are  apparently  reduced  to  two.  Yet  as  money  is  known 
only  by  name,  and  as  that  is  invariable,  it  is  assumed  that  the 
demand  which  it  represents  is  invariable.  Thus  these  relations 
are  apparently  reduced  to  one — the  supply  of  the  commodity. 
Nevertheless,  as  money  of  gold  consists  of  a  commodity,  and  as 
the  relations  of  demand  and  supply  are  common  to  all  commodi- 
ties, and  as  these  are  necessarily  variable,  such  money  evidently 
does  not  represent  invariable  demand,  but,  in  regard  to  those 
relations,  varies  with  every  variation  of  its  material. 

Money  valued  for  its  material,  as  that  of  gold,  is  well  suited 
to  the  want  of  confidence  that  characterizes  a  semibarbarous 
state  of  society ;  but  when  knowledge  and  civilization  take  the 
place  of  ignorance  and  barbarity,  mutual  respect  and  confidence 
take  the  place  of  rudeness  and  distrust,  and,  correspondingly. 


nioney  of  credit  takes  tlic  place  of  money  of  gold.  Yet  money 
of  credit  is  accepted  chiefly  because  of  its  convenience,  with  the 
understanding  that  its  redemption  is  properly  secured,  and  its 
issue  properly  regulated.  Accordingly,  to  fulfil  just  expectations 
in  these  respects  is  the  earnest  endeavor  of  every  Government 
that  authorizes  the  use  of  such  money.  For  the  accomplishment 
of  these  objects,  however,  the  only  rule  that  has  the  appearance 
of  availability  is,  to  restrict  the  issue  so  that  the  credit  dollar 
will  be  valued  equally  with  the  gold  dollar.  To  make  the  absur- 
dity of  this  rule  evident,  it  is  sufficient  to  point  to  the  difference 
between  promise  and  payment.  Of  course,  every  method  here^ 
tofore  tried  to  make  the  rule  effectual,  has  failed.  That  the 
credit  dollar  is  ever  at  par  is  simply  because  payment  is  not  de- 
manded, and  it  is  not  demanded  partly  because  money  of  credit 
is  more  convenient  than  that  of  gold,  and  partly  because  it  serves 
to  increase  the  rate  of  the  dollar  per  capita,  and  thus  the  nominal 
value  of  wealth.  The  irregularities  of  the  issues  of  money  of 
credit,  notwithstanding  the  rule,  are  well  exhibited  in  the  report 
of  the  Honorable  Secretary  of  the  Treasury,  by  which  it  appears 
that  on  or  about  the  first  of  January  of  each  of  the  several  years 
from  1834  to  1863  inclusive,  Bank  issues  were,  per  capita  of 
population,  $6.59,  6.99,  9.21,  9.52,  7.20,  8.15,  6.26,  6.09,  4.26, 

3.13,  3.90,  4.51,  5.16,  6.00,  5.90,  5.05,  5.66,  5.48,  -^ ,  5.19, 

7.97,  6.91,  7.02,  4.49,  5.26,  6.36,  5.58,  6.21,  5.49  and  6.98. 

With  this  rule,  banks  are  tempted  to  increase  their  issues  and 
extend  their  loans  until  both  they  and  their  customers  have  more 
credit  than  they  can  redeem  in  proper  time.  It  is  then  that  the 
foreign  trade,  finding  the  surplus  produce  not  sufficient,  take  for 
export  a  product  that  is  appropriated  to  an  important  home  use 
— take  money  of  gold— that  upon  which  money  of  credit  is  im- 
mediately based,  and  the  money  of  the  country  being  thus  de- 
based, the  result  is  suspension  and  general  failure. 

Evidently  the  increase  of  money  of  credit  is  not  to  meet  in- 
creased demand,  but  to  increase  trade  independently  of  demand; 
and  its  decrease  is  not  to  meet  decreased  demand,  but  because 
trade,  having  been  increased  beyond  the  demand,  under  the  stim- 
ulus of  credit,  must  be  returned  to  its  proper  support  or  perish. 
The  rate  of  the  currency  is  not  an  element  of  political  economy. 


Those  elements  are  population,  demand,  industry,  supply,  con- 
sumption, and  savings  or  wealth,  which,  being  mutually  depend- 
ent, are  not  properly  subject  to  great  or  sudden  variations  of 
relations.  Such  variations  are  generally  due  to  misconceptions 
of  moral  relations,  under  some  delusive  hope.  The  most  extra- 
ordinary instance  of  this  was  exhibited  in  the  late  Avar,  during 
which  the  supply  was  diminished  by  the  withdrawal  of  a  large 
industrial  force  ;  and,  as  the  deficiency  thus  produced  could  be 
supplied  only  from  former  savings,  the  consequence  is  a  large 
debt  to  those  from  whom  the  savings  were  obtained.  To  recover 
from  this  it  will  be  necessary  to  produce  more  per  capita  than 
heretofore,  or  to  consume  less,  or  both.  As  this  is  the  only  way 
in  which  the  means  of  payment  can  be  obtained,  and  as  therefore 
much  more  time  will  be  required  for  the  payment  of  the  debt 
than  was  occupied  in  its  creation,  it  becomes  the  Government  to 
encourage  the  industry  of  the  country  to  the  utmost,  by  freeing 
it  from  restrictions. 

The  only  true  encouragement  for  industry  is  freedom.  Stim- 
ulus is  not  encouragement.  When  the  currency  was  increased 
from  six  or  seven  dollars  per  capita  to  twenty  or  more  a  great 
increase  of  the  nominal  value  of  wealth  took  place,  and  if  it  be 
reduced  to  its  former  rate  a  proportionate  decrease  of  the  same 
will  follow;  but  these  changes  are  not  for  the  interest  of  indus- 
try, but  in  defiance  of  it.  For,  as  the  rate  of  the  dollar  governs 
its  value,  and  to  that  extent  the  value  of  wealth,  increase  of  rate 
increases  prices,  and  thus  stimulates  industry  above  the  demand, 
and  decrease  by  inverse  influence  depresses  it  below  the  demand; 
so  that  in  either  case  the  result  is  not  encouragement  but  de- 
rangement. 

Money  represents  demand,  and  thus  the  population,  in  which 
demand  resides.  It  is  therefore  an  element  of  political  economy  ; 
but  the  rate  of  the  dollar  is  not,  because  if  each  unit  of  demand 
(and  thus  of  population)  be  represented  by  $6,  that  rate  repre- 
sents all  there  is  of  demand,  and  if  each  be  represented  by  $16, 
this  rate  can  do  no  more.  If,  therefore,  an  attempt  be  made  to  in- 
crease industry,  not  by  increase  of  population,  and  thus  of  demand, 
the  cause  of  industry — not  by  industrial  freedom,  its  encourage- 
ment, but  simply  by  increase  of  the  rate  of  the  dollar — the  attempt 


■will  be  a  failure.  It  is  obviously  absurd  to  suppose  industry  can 
be  increased  by  decrease  of  rate.  Increase,  while  in  progress, 
acts  as  a  stimulus,  and  thus  appears  to  be  successful  for  a  time ; 
but  the  mere  prospect  of  decrease  reduces  industry  proportion- 
ately, and  at  once.  Moreover,  with  whatever  change  of  rate, 
there  comes  a  corresponding  change  of  prices,  so  that  expenses 
bear  the  same  relation  to  income  as  before.  Yet,  as  the  value  of 
the  dollar  is  inversely  as  its  rate,  so  is  the  value  of  debts,  be- 
cause debts  consist  of  dollars.  Accordingly,  to  increase  rate  is 
to  diminish  indebtedness,  and  to  diminish  rate  is  to  increase  in- 
debtedness ;  so  that  change  of  rate,  whether  by  increase  or  de- 
crease, is  equivalent  to  repudiation. 

With  money  of  gold  and  of  credit,  changes  of  rate,  being  fami- 
liar, acquire  a  natural  and  proper  appearance,  and  are  therefore 
generally  accepted  as  proper ;  and,  from  the  facility  with  which 
changes  of  the  rate  of  credit  money  may  be  made,  this  species  of 
currency  is  advocated  because  of  its  elasticity,  a  quality  greatly 
admired  by  financiers  (?).  Nevertheless  there  is  evidence  of  a 
tendency  towards  a  single  rate,  which,  for  want  of  a  better  term, 
is  called  the  gold  rate — as  though  gold  or  money  of  gold  is 
or  has  a  rate — as  though  money  of  credit  has  a  rate  at  which 
alone  it  is  equivalent  to  gold — an  attempt  at  a  definition, 
Avhich,  however  unsuccessful,  is  evidence  of  the  tendency.  Thus 
it  seems  to  be  felt,  if  not  understood,  that  the  rate  of  the  dollar 
does  not  affect  the  rate  of  the  supply  of  commodities — that  when 
commodities  are  abundant  they  will  be  proportionately  cheap, 
however  high  prices  may  be,  and  when  they  are  scarce  they  will 
be  proportionately  dear,  however  low  prices  may  be.  It  seems 
to  be  felt  that  it  is  not  rate  hut  change  of  rate  that  deranges  busi- 
ness relations,  and  thus  injures  industry  ;  and  this  consciousness, 
however  ill-defined,  by  its  tendency  towards  constancy  of  rate, 
will  ultimetely  lead  to  the  truth  in  regard  to  money.  The  truth 
is,  that  value  exists  only  in  persons — that  therefore  the  unit  of 
population  is  the  unit  of  value — that  this  unit  may  be  represented, 
and  that  its  representative  is  the  money  unit. 

The  tiuth  of  money  is  based  in  nature,  consequently  it  exerts 
more  or  less  influence,  whether  distinctly  recognized  or  not.  To 
its  influence  may  be  attributed  the  question,  What  is  the  proper 


quantity  of  money  ?  a  question  that  has  not  hitherto  been  Intel' 
ligently  answered,  and  Avhich  cannot  be  so  answered  until  the 
truth  of  money  has  been  admittted.  To  its  influence,  also,  may 
be  attributed  that  clause  of  the  Constitution  which,  like  a  bow 
drawn  at  a  venture,  requires  the  value  of  money  to  be  regulated 
and  fixed,  though  there  is  no  money  in  existence  to  which  the 
rule  is  applicable ;  though  there  is  none  to  Avhich  regularity  of 
rate  or  constancy  of  value  is  possible. 

Money  represents  value ;  but  value  is  not  a  thing,  nor  does  it 
reside  in  things.     Value  is  demand,  desire,  esteem,  want,  wnsh 
— it  is  a  power  existing  in  persons — the  motive-power  of  the 
population — a  power  that  may   be   represented  immediately,  if 
necessary.     Then,  the  representative  of  the  unit  of  popula^on, 
and  thus  of  value  will  be  the  true  money  unit.     But  it  may  also 
be  represented  through  the  medium  of  the  dollar,  at  a  fixed  rate 
per  capita.    When  this  is  done,  by  proper  authority,  true  money 
will  exist.     Then,  the  dollar  will  represent  constant  value,  and 
will  thus  become  the  true  medium  of  exchange — domestic  ex- 
change.    The  difference  between  exchange  and  redemption  is,  in 
exchange  gold  is  supplied  at  the  market  price,  and  in  redemp- 
tion it  is  supplied  at  a  given  price.     When,  however,  the  given 
price  equals  the  market  price,  there  is  little  redemption,  because 
there  is  little  demand ;  and  when  it  does  not,  there  is  little  re- 
demption, because  there  is  little  ability.     Indeed,  redemption  is 
not  generally  desired.     Money  is  chiefly  appropriate  to  the  re- 
tail trade — the  great  trade  of  every  country — all  being  parties 
to   it.     The  wholesale  trade,  which,  though   it  has  an  imposing 
appearance,  is  much  inferior  to  the  retail  in  regard  to  the  num- 
ber of  the  parties  to  it,  makes  little  use  of  money.  Yet  it  is  only 
the  wholesale  trade,  and  that  only  in  its  foreign  department,  that 
asks  for  redemption — that  asks  to  be  allowed  to  undermine  the 
credit  of  the  country,  by  withdrawing  the  base  on  which  the 
credit  of  the  currency  immediately  rests,  that  it  may  export  it. 
Truly  gold  is  a  product  of  the  country,  and  imports  should  be 
paid  with  surplus  produce  ;  but  while  the  credit  of  the  currency, 
and  thus  credit  generally,  is  based  on  gold,  that  metal  cannot  be 
a  surplus  product,  be  the  aggregate  supply  what  it  may.     What 
the  people  desire  of  money  is  not  redemption,  but  constancy  of 


6 

value.  Government  has  declared  that  the  dollar  shall  be  the 
legal  means  of  payment.  It  has  thus  declared  the  name  by  which 
debts  and  credits  shall  be  known.  This  is  a  declaration  of  great 
value,  inasmuch  as  it  defines  accounts  and  thus  makes  them  pos- 
sible. It  has  also  declared  that  the  dollar  shall  consist  of  a  given 
weight  of  gold.  This  also  is  a  declaration  of  great  value,  inas- 
much as  it  determines  the  commodity  by  means  of  which  ex- 
changes shall  be  made.  Thus  the  highest  style  of  barter  is  at- 
tained. But  this  is  a  low  style  of  commerce,  as  may  be  seen 
thus :  Omitting  its  gold  element,  the  dollar  has  legal  value  that 
is  not  given;  and  omitting  its  legal  element,  it  has  gold  value  that 
is  not  given.  In  short,  the  value  of  the  dollar  is  not  and  cannot 
be  given.  Moreover,  in  the  presence  of  credit  money  gold  is  not 
current ;  and,  being  thus  deprived  of  its  current  function,  it  is 
practically  a  commodity,  with  two  conflicting  uses,  one  to  meet 
foreign  demand  in  exchange  for  imports,  the  other  to  meet  do- 
mestic demand  as  security  for  money  of  credit.  It  is  greatly 
valued  for  each  of  these;  because  greatly  valued  for  other  uses ; 
but  for  use  as  a  means  of  domestic  exchange  it  is  almost  without 
value.  On  the  contrary,  true  money  is  the  means  of  domestic 
exchange,  and  of  that  only.  Being  of  no  use  for  any  other  pur- 
pose, and  without  foreign  demand,  it  has  only  one  function,  and 
that  the  only  one  proper  to  money — the  representation  of  given 
value. 

In  view  of  the  universal  and  exclusive  use  of  money  consist- 
ing of  gold  or  of  credit,  it  may  well  be  supposed  that  no  other  is 
possible.  Happily,  however,  true  money  is  not  onl}'  possible  but 
probable.  Much  time  elapsed  before  money  was  invented,  and 
much  intervened  between  money  of  gold  and  money  of  credit, 
liud  much  must  intervene  between  the  latter  and  true  money  J 
but  a  large  part  of  this  is  past,  and  from  the  rapid  diminution  of 
those  intervals,  due  to  the  rapid  increase  and  diffusion  of  knowl- 
edge, it  maybe  assumed  that  the  time  for  true  money  is  at  hand — 
the  time  when  it  will  be  seen  that  true  money  is  as  essential  to 
the  health  of  business  as  a  pure  atmosphere  is  to  the  health  of 
the  population. 

True  money  will  be  a  present  economy  so  far  as  it  takes  the 
place  of  the  national  debt,  and  it  will  be  a  future  revenue  to  the 


extent  of  the  Increase  of  population.  The  rate  of  Increase  has 
been  more  than  three  and  a  half  per  cent,  per  annum,  but  taking 
it  at  three  per  cent,  there  are  persons  living  who  will  be  living 
when  the  population  will  be  two  hundred  and  fifty  millions,  and 
the  currency  proportionate.  To  the  individual  the  currency 
will  then  be  of  no  more  importance  than  now,  but  the  aggregate 
interest  involved  will  be  vastly  greater.  Thus  the  importance  of 
understanding  the  nature  of  money,  in  view  of  the  possibilities 
of  the  country,  is  very  great. 
Prospective  Population,  Currency  and  Revenue  from  Currency. 


1860 

Populai 

31 

tion. 

millions. 

Currency. 

Annual  Revenue  from  Cur- 
rency during  each  decade. 

1870 

40 

(( 

$  640 

millions. 

1880 

52 

u 

830 

u 

$20 

millions. 

1890 

67 

u 

1070 

(< 

24 

(( 

1900 

87 

(( 

1392 

u 

32 

a 

1910 

113 

(( 

1808 

a 

42 

li 

1920 

147 

u 

2352 

u 

54 

a 

1930 

191 

(( 

3056 

a 

70 

a 

1940 

248 

u 

3968 

n 

91 

a 

With  true  money  imports  will  be  met  and  balanced  by  exports 
with  a  regularity  heretofore  unknown ;  because,  though  waves 
of  credit  will  continue  to  succeed  each  other — pulsation  being  in- 
separable from  action — yet,  commercial  credit  without  the  stim- 
ulus of  money  of  credit,  will  never  pulsate  so  that  the  general 
relations  of  industry  will  be  seriously  disturbed. 

Commercial  credit  is  anticipated  demand,  which,  being  neces- 
sarily in  excess  of  existing  demand,  stimulates  business  to  a 
corresponding  excess ;  then,  credit  having  exausted  itself, 
business  descends  as  far  below  the  average  of  demand  as  it  had 
risen  above  it.  Commercial  credit  is  represented  by  money  of 
credit ;  consequently,  the  use  of  such  money,  in  credit  business, 
is  equivalent  to  multiplying  credit  into  itself.  Under  the  influ- 
ence of  money  of  credit,  therefore,  business  rises  to  a  multiplied 
height,  and  sinks  to  a  corresponding  depth. 


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9 

With  regard  to  the  creation  of  true  money,  what  the  general 
Government  declares  to  be  the  dollar  is  the  dollar.  There  is  no 
other  way  in  which  it  can  be  created.  It  is  therefore  a  legal 
document.  The  government  made  several  declarations  of  the 
dollar,  some  inscribed  on  gold,  some  on  silver  ;  all  equally  dol- 
lars. They  differed  only  in  the  quantity  of  the  gold  or  of  the 
silver  on  which  they  were  inscribed  ;  and  this  difference,  in 
accordance  with  government  usage,  was  always  a  diminution. 
As  each  declaration  Avas  made  to  supercede  all  previous  ones, 
the  latest  declared  dollar  is  meant  when  any  promise  of  a  dollar 
is  made.  With  regard  to  the  credit  dollars  now  in  use,  though 
the  people  through  their  government  have  guaranteed  their  pay- 
ment in  gold,  yet,  as  they  are  held  by  the  people  who  authorized 
their  issue,  it  rests  with  them  to  say  whether  they  prefer  to  con- 
tinue their  use,  to  redeem  them,  or  to  replace  them  with  true 
dollars. 

The  true  dollar  will  be  inscribed  on  paper,  but  on  what  else 
is  a  death  Avarrant  or  a  pardon  inscribed  ?  Are  these  of  no  value 
because  they  are  not  inscribed  on  gold  ?  If  the  true  dollar  be 
of  no  value  because  it  is  inscribed  on  paper,  then  the  govern- 
ment we  value  most  is  of  no  value  for  the  same  reason. 

Heretofore  through  ignorance  of  the  nature  of  money,  and 
otherwise,  repudiation  in  some  aspect  has  been  the  rule  almost 
from  the  beginning  of  the  creation  of  money  to  the  present  day. 
Now,  however,  when  the  nature  of  money  is  known,  and  here, 
where  the  people  have  the  supreme  power,  this  nuisance  should 
be  abated  by  making  the  creation  and  maintenance  of  true 
money  a  rule  of  the  organic  law. 

Money  having  been  reduced  to  a  science  by  the  determination 
of  its  relations,  the  reduction  of  that  science  to  practice  will  not 
only  encourage  industry  by  introducing  into  domestic  exchange 
the  element  of  constant  value,  but,  by  thus  removing  the  chief 
support  of  spurious  finance,  it  will  be  the  means  of  achieving  a 
great  moral  reform. 

As  the  true  dollar  when  declared  will  supersede  the  present 
dollar,  and  all  existing  substitutes,  and  as  its  relation  to  the 
unit  of  value  will  be  strictly  defined  and  constantly  maintained, 
it  will  be  the  standard  measure  of  the  relations  of  value.     And 


10 

as  it  represents  domestic  demand  and  has  no  particular  lien,  it 
will  be  taken  to  meet  and  balance  domestic  supply  wherever 
that  exhibits  a  surplus  that  will  pay  transportation  and  commis- 
sion. Yet,  as  the  money  unit  of  the  United  States  will  not  be 
that  of  any  other  country,  foreign  exchange  will  continue  to  be 
governed  by  the  American  price  of  foreign  money. 

It  is  said,  that  as  other  countries  base  value  on  gold,  we  must 
do  the  same,  otherwise  how  is  foreign  exchange  to  be  balanced. 
Foreign  exchange  is  to  be  balanced  after  true  money  is 
established,  just  as  it  always  has  been,  and  always  will  be, 
with  whatever  currency ;  that  is,  by  calculations,  requiring 
familiarity  with  the  primary  rules  of  arithmetic,  and  with  the 
weights,  measure  and  monies  of  the  nations  in  question.  If  we 
postpone  wise  action  until  every  body  else  is  wise,  what  will  be 
the  result  ?  International  arrangements  are  pretty  play  things. 
But  the  true  rule  of  action  is  wisdom.  Be  sure  you  are  right, 
then  go  ahead,  let  others  follow.  Others  will  follow,  but  follow- 
ers are  always  behind. 

It  is  also  said  that  by  returning  to  the  gold  rate,  whatever 
that  is,  commodities  will  be  as  cheap  as  formerly.  This  theory 
is  based  on  the  practice  of  accepting  "cheap"  and  "low 
priced"  as  synonymous.  Cheapness  is  due  to  increase  of  the 
supply  of  commodities  ;  low  prices  are  due  to  decrease  of  the 
rate  of  the  dollar.  Thus  commodities  may  be  at  once  high 
priced  and  cheap,  or  low  priced  and  dear. 

Formerly  the  average  rate  of  the  dollar,  for  a  number  of  years, 
was  six  per  capita.  To  adopt  thi  s  rate  will  be  to  reduce  the 
nominal  value  of  wealth  in  the  ratio  of  sixteen  to  six ;  and  at 
the  same  time  to  increase  the  value  of  debts  public  and  private 
in  the  ratio  of  six  to  sixteen.  These  are  results  not  of  specu- 
lation but  of  calculation,  and  are  therefore  as  certain  as  that 
two  and  two  are  four,  though  they  are  not  always  apparent. 
They  are  not  apparent  at  present,  chiefly  because  our  bonds 
being  good  for  six  per  cent,  interest  in  gold,  there  is  a  large  de- 
mand for  them  in  Europe,  consequently  they  serve  as  a  substi- 
tute for  gold  in  payment  of  imports,  and  will  do  so  until  the 
foreign  demand  for  gold  equals  that  for  bonds. 

When  Government  takes  the  responsibility  of  supplying  a  true 


11 

currency,  banking  may  be  made  free,  under  a  few  simple  rules- 
Then  bankers  mny  be  allowed  to  govern  their  charge  of  interest 
for  loans,  by  the  demand  for  money.  If  this  much  justice  were 
granted  them,  investments  in  banks  would  be  increased,  and 
both  lenders  and  borrowers  would  be  benefitted. 

Essential  principles  of  money. 

Value  or  demand  is  the  motive  power  of  persons. 

The  motive  power  of  the  population  is  the  sum  of  value. 

The  motive  power  of  the  unit  of  population  is  the  unit  of 
Value. 

The  unit  of  value  may,  by  proper  authority,  be  represented. 

The  rej^resentative  of  the  unit  of  value  is  the  money  unit. 

The  money  unit  may  be  called  the  dollar. 

The  dollar  may  represent  the  unit  of  value  in  whole  or  in 
part. 

The  value  of  the  dollar  is  given  when  the  rate  of  its  repre- 
sentation is  given. 

The  dollar  is  true  when  its  rate  is  fixed. 

Circumstances  may  increase  demand. 

Increase  of  demand  increases  industry. 

Increase  of  industry  requires  increase  of  the  means  of  ex- 
change. 

The  means  of  exchange  are  the  representatives  of  demand. 

The  representatives  of  demand  are  true  dollars. 

The  demand  or  value  which  the  true  dollar  represents  is  as 
the  state  of  industry. 

A  currency  consisting  of  true  dollars  is  therefore  equal  to  any 
possible  demand. 

Debts  consist  of  dollars. 

Debts  may  lay  over  through  several  states  of  industry. 

The  value  of  the  true  dollar  corresponds  to  the  state  of  in- 
dustry. 

If  a  given  industry  be  equal  to  a  true  dollar  in  one  state  of 
industry  it  is  so  in  any  other. 

With  true  dollars  therefore,  debts  that  lay  over  will  be  as 
easily  paid  in  one  state  of  industry,  as  in  another. 


12 

One  of  the  duties  of  the  government  is  to  encourage  industry, 
and  one  of  the  means  is  the  creation  of  true  money — money  that 
is  not  subject  to  change  of  rate,  and  that  is  therefore  constant  in 
vahic — money  that  represents  the  people,  and  is  therefore  as 
good  as  they — money  that  is  a  perpetual  lien  on  the  wealth  of  the 
country,  and  is  therefore  as  safe  as  that — money  that  is  inde- 
pendent of  material  security,  and  is  therefore  cheaper  than  any 
other — money  that,  being  true  in  kind,  constant  in  value,  good 
as  the  people,  safe  as  their  wealth,  cheaper  than  any  other,  of 
undivided  function,  of  unrestricted  circulation,  and  of  undoubted 
authority,  has  all  the  qualities  that  money  should  have,  and  not 
any  it  should  not  have. 

GEO.  S.  LANG. 

Philadelphia^  February^  1868. 


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UNIVERSITY  OF  CALIFORNIA 

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